If we compare the popularity of Bitcoin in 2020 and 2019, they are two different worlds. Namely, after the halving on 12 May 2020, Bitcoin entered a bull market phase that has had an incredible success. It has become a hot topic worldwide and accumulated a market cap of over $1 trillion.
This bull cycle is still in full force even today and has left a lot of crypto enthusiasts wondering what has triggered this bull run. Here we cover everything about the bull cycle and the factors that have prompted its growth.
Market's Supply and Demand
This is the main reason why there was this kind of success. The interaction between the supply and demand on the market affects Bitcoin's value because Bitcoin is created as a distributed digital currency. Moreover, the supply of Bitcoin is capped at 21 million by Satoshi Nakamoto, which was a decision that triggered the long-term success of Bitcoin.
Moreover, its value continues to rise because the demand is growing faster than the supply. Compared to the other altcoins created after Bitcoin, this cryptocurrency has the smallest range of Bitcoin tokens.
Important Protocols
There are Bitcoin protocols that regulate the number of available Bitcoin tokens in circulation. First, it should be noted that there is a stable rate at which new BTC are being introduced to the market, and that is about 10 minutes per block of transactions which is the time needed to process one block on the network.
But, every four years, after a set of new 210,000 blocks are mined, Bitcoin halving occurs, which splits in half the block reward, and at the same time, it reduces the ongoing supply of BTC.
The second factor that impacts the work of the miners and the supply of BTC is the protocol that manages the level of difficulty of mining based on the computing power in the network or, in other words, when the competition rises in the network, that level of difficulty also surges.
Online Trading Sites
The rise of online trading is another reason why the demand is greater, as there is a vast range of trading sites. For example, the Bitqh software is an automated trading platform that runs on auto-pilot, making it a great choice for beginners.
This AI-driven trading system conducts in-depth technical analysis, and it is able to provide consistent results for its members. In fact, as a member, you can potentially earn up to $750 in a single day of trading. In order to open an account, you only need a deposit of $250.
Demand From Institutional Investors
What made this bull run very successful and different from the others is the prolonged support from institutional investors, which wasn't the case earlier, and there weren't that many dedicated crypto trust funds as there are today. This is a completely different situation because we have reputable organizations like the Grayscale Bitcoin Trust Fund, which is serving well-respected investors, and other trust funds that are essentially buying BTC in large quantities, and that definitely pushes the boundary of the market demand.
When it comes to government regulations, as many governments have noticed that the companies and accredited investors are supporting BTC, they are looking to regulate the cryptocurrency. Also, most of the governments around the world are taking a favorable position regarding BTC and other altcoins because, all things considered, they offer many benefits for the global economy.
Final Thoughts
To wrap up, Bitcoin was designed in a way to offer the best value for its investors because there are protocols that regulate its inflation rate and supply. Even though Bitcoin has had its ups and downs in the past, today, its value is over $60,000, and before the halving, the price was around $9,500, which shows that in a very short amount of time, the price increased enormously thanks to the consistent support by institutional investors as well as retail investors.
Also, we can't forget that many popular brands around the world are accepting BTC and are also responsible for the rising market demand. Plus, the attitude of governments around the world is definitely creating beneficial conditions for mainstream crypto adoption.